Endogenous Tariff Hypothesis: A Case of Iran

Document Type : Research Paper

Authors

1 Associate Professor, Faculty of Economics and Administrative Sciences, University of Mazandaran, Iran

2 Faculty of Economic and Administrative Sciences, University of Mazandaran, Iran

Abstract

According to endogenous tariff hypothesis, tariff is endogenously determined by the set of political economy factors. Using the Co- integrated VAR approach and in the framework of the hypothesis, the present study examined the determinants of tariff protection in Iran over the period 1971-2010. Based on the results, though no evidence has been obtained about the impact of unemployment and import penetration rate on forming protection policies in Iran but the significant effect of non oil product, the share of industrial sector, the share of oil income and real exchange rate indicate the importance of political economy atmosphere and economic factors in forming the policies. In sum, the hypothesis is verified and in this framework, we suggest that we should pay more attention to the role of the factors effecting economic liberalization policies as well as the reduction of dependency on oil income and government size in order to increasing the success and continuation of the policies.

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History

  • Receive Date: 02 April 2012
  • Revise Date: 25 June 2014
  • Accept Date: 09 February 2014

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